Quest and Corewell Health Form Joint Venture for Michigan Laboratory Services

Quest Diagnostics and Corewell Health have formed a joint venture to create Diagnostic Lab of Michigan. A 100,000-square-foot laboratory will be built in Southfield, Michigan, featuring cutting-edge technologies. Quest will own a 51% stake, while Corewell retains a 49% interest. The joint venture is expected to commence operation in Q1 2027. Quest will manage Corewell's 21 hospital laboratories through their Collaborative Lab Solutions program. The partnership aims to enhance laboratory services and improve accessibility and affordability of healthcare in Michigan.

Corewell Health and Quest Diagnostics (NYSE: DGX) have entered into a strategic joint venture to expand access to innovative, quality, and affordable laboratory services in Michigan. The new venture, Diagnostic Lab of Michigan, LLC, will be headquartered at a state-of-the-art 100,000-square-foot facility in Southfield, Michigan, slated to open in the first quarter of 2027.

The joint venture, which will be operational in Q1 2027, will feature advanced technologies such as automated microbiology and high-throughput molecular testing. Quest Diagnostics will manage Corewell Health's 21 hospital laboratories through their Collaborative Lab Solutions (Co-Lab) program, which includes reference laboratory testing, professional laboratory management services, laboratory workforce and supply chain management, and analytics.

The equity ownership of the joint venture will be shared, with Quest Diagnostics owning 51% and Corewell Health retaining a 49% interest. The transaction meets all of Quest's criteria for growth, profitability, and returns. Additional terms of the agreement were not disclosed.

Corewell Health Chief Operating Officer Chad Tuttle expressed enthusiasm about the collaboration, stating, "We are thrilled to collaborate with Quest Diagnostics, a leader in diagnostic lab services. This new joint venture will support our ongoing efforts to make healthcare more affordable and accessible."

Jim Davis, Chairman, CEO, and President of Quest Diagnostics, highlighted the benefits of the partnership, saying, "This joint venture combines Corewell Health's first-rate academic expertise and deep ties to Michigan with Quest's leadership in scaling diagnostic innovation to improve access, affordability, and patient care."

The joint venture is expected to enhance laboratory services and improve accessibility and affordability of healthcare in Michigan. Both companies aim to continue serving providers and patients in Michigan from their existing patient service centers, which will be run by the joint venture, as well as from their existing laboratories, until the new lab is operational.

References:
[1] https://www.marketscreener.com/news/corewell-health-and-quest-diagnostics-to-enter-into-joint-venture-providing-enhanced-laboratory-serv-ce7c50d9db81fe21
[2] https://www.prnewswire.com/news-releases/corewell-health-and-quest-diagnostics-to-enter-into-joint-venture-providing-enhanced-laboratory-services-in-michigan-302538095.html